A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.

Sheriff's officials also have received complaints from two Citrus Springs property owners who contracted with Sky Development to build new homes. The property owners made down payments of $25,000, according to the Sheriff's Office, but construction crews never showed up to work on the properties.

The investigation comes on the heels of several high-profile mortgage foreclosure cases involving the company. Last month, Circuit Judge Carol Falvey ordered Citrus Development Venture LLC, a company partially owned by Sky Development, to pay $6.62-million to creditors. And last week, Naples developer CC Development filed a foreclosure suit alleging that Sky owes more than $350,000.

Sky Development Group representatives could not be reached for comment. A recorded message at Sky's Miami office said the company's voice mailbox was full.

Investigators also haven't been able to track down anyone from Sky Development, or the company's assets, sheriff's spokeswoman Gail Tierney said.

The three indicted mortgate brokers made their first appearance in federal court this afternoon. And an FBI senior agent tells NewsChannel 9 the three are only part of a larger network. Eight have been charged to date. The government says this scheme in Chattanooga involves well over 100 houses and fraudulent dollars in the millions.

Solution to absorb excess housing supply. Give France to the Muslims and let any European who wants to move to the USA come! I say ten or twenty million Europeans would and we'd solve our house problem. Also, tell any person living in Israel that they can freely come to the USA so that Palestine can become a free, multi-cultural democracy for all jews, christians and muslims. The two state solution is a failure so let us (the USA) take the lead in creating a new, united, Palestine.

I am neither a christian, jew, or muslim but find references by GWB about islamo-fascists offensive and a gross distortion. GW needs to apologize for his distortion. I would no futher call an Irish Republican Army member a christian fascist or any other religion. Though there may be fascists who call themselves christian, jewish, muslim, hindu, or atheist, fascism is a political view, not a religous one.

Second, though there are extremist views within the ummah of Islam, there are extremist views within all religions. I also find the new coalition in Israel scary when a Jew calls for the expulsion of all muslims form Israel. What make them then any different than the people they fight? This is why NOW is the time for our leaders to stand up and distance themselves from Israel and call for a new Peace accord. Only then will muslims take us seriously and maybe help bring the Iraq crisis to a conclusion without creating more terrorists.

The prophet Muhamed said that the greatest threat to islam was three things, Fundamentalists, fundamentalists, fundamentalists. He preached that faith was not a matter of coercision. In the 6th century his approach to women and women’s rights was the most advanced in the world. The first teachings he gave were that all who worshipped in faith the one true god were family and that included one who in ignorance bowed to a rock and prayed knowing in his heart there was only one god. Though some of the practices of early Islam seem barbaric, in comparison to the surrounding people they were enlightened, tolerant, and just. You can remember that the Jewish king of Yemen dug a trench and burnt over 20,000 christians in it. This kind of barbarism was quite common even in the so called “christian areas” of the world. Catholics persecuted Byzantines, Byzantines, Copts, etc. Under Islam, all faiths were protected. Islam was in a golden age while christian europe was in the dark ages. We may feel that some of the treatment of non-muslims was discriminatory we have to compare that to the treatment of other religous groups and it becomes apparent that Islam was more tolerant.

One can almost say that fundamentalists are the salt of any faith and thus of the earth, but as we all know too much salt poisons, not only the faithful but the earth. Nothing grows in a salt poisoned earth.

Islam, like judaism, like Christianity, are all evolving religions. The prophet saw the schism between jews and christians, their numerous sources of scripture and teachings and felt a call to go back before either of them to Abraham, the father of arabs, and the origianl monotheism and recited the quran, a religous source of one, given over 20 years, not centuries to be corrupted by men.

Because men today corrupt his teachings, call themselsve sunni or shia, jihadist, murder in the name of the prophet they do him and Islam a great injustice as he was a messenger of peace.

I think that someone needs to stand up and announce to the world that hate and intolerance are not permitted. Instead of calling muslims fascists why not find a leader to say that Islam is part of the family of all religous truth and is protected. Muslims should be allowed to practice their faith in non-muslim countries and non-muslims should be protected and allowed to worship in muslim lands. Western powers need to apologize for their many attempts to colonize and conquer muslim lands (mostly the French, British) and their attempts to impose western democracy. Islam has its own form, found in the quran, that allows for the will of the majority.

As for Israel? Why not find an Israeli strong enough to stand up and say to the Palestinians, “Come, let us reason together.” To call for the creation of one, undivided Palestinian state where Jew, Christian, and Muslim can live together in peace. Where democracy rules and elects leaders. Where private property is protected. Where both sides agree to reject foreigners attempts to control their destinies. Where Jerusalem is capital of a United Palestine. Tel Aviv can be the capital of a Jewish state, like Phoenix is to Arizona. There can be a capital of the west bank, of Galilee etc. Jews and Muslims and Christians can elect represenatives to sit in Jerusalem to speak for their needs and protect their values. Where the military is there to protect Arab, Jew, Christian, no matter what their creed, religion, race.

"Second, though there are extremist views within the ummah of Islam, there are extremist views within all religions."

Not that your rambling incoherence has anything to do with housing but your assertion fails to actually name all of the alleged Christian, Jewish, Hindu, and Buddhist "extremist" groups there are in the world committing acts like this:

Hollywood director and documentary film maker Aaron Russo, currently receiving a wave of plaudits for his latest release, America: From Freedom to Fascism, told The Alex Jones Show that Nicholas Rockefeller had personally assured him there was going to be an "event" that would trigger the invasions of Afghanistan and Iraq eleven months before 9/11 took place.

Saying he had been approached many times by the Rockefellers and other members of the CFR elite in an attempt to recruit him, Russo recalled a conversation that would come home to roost on September 11, 2001.

"Here's what I do know first hand - I know that about eleven months to a year before 9/11 ever happened I was talking to my Rockefeller friend (Nicholas Rockefeller) and he said to me 'Aaron there's gonna be an event' and he never told me what the event was going to be - I'm not sure he knew what the event was going to be I don't know that he knew that," said Russo.

In a stealth maneuver, President Bush has signed into law a provisionwhich, according to Senator Patrick Leahy (D-Vermont), will actuallyencourage the President to declare federal martial law (1). It doesso by revising the Insurrection Act, a set of laws that limits thePresident's ability to deploy troops within the United States. TheInsurrection Act (10 U.S.C.331 -335) has historically, along with thePosse Comitatus Act (18 U.S.C.1385), helped to enforce strictprohibitions on military involvement in domestic law enforcement.With one cloaked swipe of his pen, Bush is seeking to undo thoseprohibitions.

Public Law 109-364, or the "John Warner Defense Authorization Act of2007" (H.R.5122) (2), which was signed by the commander in chief onOctober 17th, 2006, in a private Oval Office ceremony, allows thePresident to declare a "public emergency" and station troops anywherein America and take control of state-based National Guard unitswithout the consent of the governor or local authorities, in orderto "suppress public disorder."

President Bush seized this unprecedented power on the very same daythat he signed the equally odious Military Commissions Act of 2006.In a sense, the two laws complement one another. One allows fortorture and detention abroad, while the other seeks to enforceacquiescence at home, preparing to order the military onto thestreets of America. Remember, the term for putting an area undermilitary law enforcement control is precise; the term is "martiallaw."

The USDA has reported detection of H5N1 in Michigan for the third time. The most recent report is in Mallard ducks in St Claire County. Like the sample reported for Tuscola County in Green-winged teals, viral isolation tests are ongoing. In August, H5N1 was isolated from Mute swans in Monroe County. Similarly, H5N1 has been isolated from resident wild mallards in Queen Anne's County, MD as well as Mallard ducks in Crawford County, PA.

While the price of West Texas Intermediate oil was above $70/barrel for much of the first half of 2006 and the average price of all oil grades was about $27/barrel higher than the average during 2004, global liquid hydrocarbons production declined more than 100,000 barrels/day (b/d) compared to the first half of 2005, according to U.S. Department of Energy/Energy Information Administration (US DOE/EIA) data. For comparison purposes, global liquid hydrocarbons production increased 3.43 mb/d in 2004 and 1.47 mb/d in 2005. Much of the global liquid hydrocarbons production increase from 2003 to 2005 was due to OPEC, which increased production 3.66 mb/d as excess capacity was brought on-line. Now there is little or no excess capacity to bring on-line.

Many new oil projects have come on-line globally in the last few years and many will come on-line in the next 5 years. Unfortunately, many of the world¢s large oil fields are declining rapidly and the price of oil has virtually no impact on the rate of decline for those declining fields. Increases in production from new projects are largely being negated by production declines from old fields.

Now back to housing. San Diego has had a dramatic increase in NOD filings and I personally know of several condo developers who've unloaded entire projects at 70-80% of what they just paid in the last 12 months. Something scary is begining to happen here. I know of condos that are selling at 50% off with creative backdoor concessions unbeknownst to the lender, which are also being done to avoid litigation with other owners in the project who paid twice as much only months ago.

I work for a large bank and there's a very noticable increase in requests for money from investors who are now in a panic

AUSTIN, Texas - David M. Walker sure talks like he's running for office. "This is about the future of our country, our kids and grandkids," the comptroller general of the United States warns a packed hall at Austin's historic Driskill Hotel. "We the people have to rise up to make sure things get changed."

But Walker doesn't want, or need, your vote this November. He already has a job as head of the Government Accountability Office, an investigative arm of Congress that audits and evaluates the performance of the federal government.

Basically, that makes Walker the nation's accountant-in- chief. And the accountant-in- chief's professional opinion is that the American public needs to tell Washington it's time to steer the nation off the path to financial ruin.

From the hustings and the airwaves this campaign season, America's political class can be heard debating Capitol Hill sex scandals, the wisdom of the war in Iraq and which party is tougher on terror. Democrats and Republicans talk of cutting taxes to make life easier for the American people.

What they don't talk about is a dirty little secret everyone in Washington knows, or at least should. The vast majority of economists and budget analysts agree: The ship of state is on a disastrous course, and will founder on the reefs of economic disaster if nothing is done to correct it.

:Their basic message is this: If the United States government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. That's almost as much as the total net worth of every person in America _ Bill Gates, Warren Buffett and those Google guys included."

Though he initially remained mum about the wave of anti-Georgian violence sweeping the country, Putin has since condemned it. Yet he himself seems to be embracing an increasingly nationalist line. Illegal immigrants and "ethnic gangs" have "no place" in a "law-abiding country," Putin said earlier this year.

Does anyone know anything about "bank owned properties" the ones listed in RealtyTrac? I would like to know if this would be a possible way to get into a home that I could otherwise not afford. Thank you.

It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.

Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.

This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.

Recently, a developer regaled me with a story about a house that seemed to be cursed.

Although he beautifully renovated it and priced it below market, the Oakland bungalow just wouldn't sell. Deals fell through repeatedly for bizarre and unrelated reasons: Buyers got cold feet or moved -- one was even arrested.

By the time the fourth deal collapsed, the developer was in a state of financial panic. So, when one of the mortgage brokers who had helped a previous prospective buyer called with a new one who would close the deal for -- get this -- $100,00 over the asking price, he naturally jumped at the offer.

"The catch was that I had to give the $100K back to them after the close of escrow," the guy told me, still looking shell-shocked. "I couldn't understand why they would want to do that. The place was completely remodeled."

(Most buyers who get cash back after escrow pour that money into repairs. Typically, though, lenders like to keep this amount to no more than 3 percent of the purchase price.)

The developer went through with the sale, wondering what his buyers (whom he never met) were up to. Because he wasn't lying about anything -- everything was disclosed on the purchase contract -- he didn't feel he was doing anything wrong.

A couple weeks later, another friend who is a real estate agent called me. "I think I have a scoop for you," he told me, his voice vibrating with gumshoe grit. He'd heard that a prominent East Bay company was training its agents to inflate properties by $50,000 to $150,000, then have sellers return the cash after the close of the deal.

Unlike the arrangement with the developer, these deals were concealed from lenders by adding the cash-back arrangement onto an addendum apart from the purchase contract.

How did my friend hear about this practice? A local manager of a prominent real estate company had tipped off my friend's broker over lunch. The manager, who had been shocked at the behavior, had then gone back and looked at his own agents' files to see whether the practice ever happened in his own office. "The guy said he found so many in his own files in the past couple weeks, he didn't want to look anymore," my agent friend said.

What exactly was happening here? The developer didn't think he was doing anything illegal, and the broker had no idea the inflation was happening on his watch. But in both cases, everyone involved probably would have been considered at least partially culpable if the lenders could mount a case that they were being deceived.

It's the convoluted world of mortgage fraud, a crime in which it's sometimes hard to disentangle victim from criminal, and crime from business as usual.

Why? In the years of booming appreciation and bargain-basement interest rates, real estate has become a national obsession. With it have come certain run-of-the-madness practices:

Appraisers agree to inflated property values. (By next month, the market will go up so much, they'll be valid.)

Agents write offers with increasing amounts of cash back. (How else can the poor homeowners get that Viking range?)

Mortgage brokers play the "We'll get you that loan no matter what" game of social engineering. (How else can schoolteachers buy a home?)

But now the proverbial vultures have come home to roost -- mortgage fraud is being busted left and right.

This month, the most spectacular example so far was reported in the Wall Street Journal: an $80 million federal grand jury case involving more than 100 homes in Indiana. Also, last year, one of the largest property owners in Buffalo, N.Y., was convicted of perpetrating a $4 million fraud-for-profit scheme, sentenced to a year in prison and slapped with a $1.5 million fine.

The New York Times has reported on the precipitous rise in mortgage fraud, quoting the FBI that lenders lost an estimated $1 billion last year, double the previous year's estimate, from mortgage fraud. (For a thorough list of recent cases, go to www.mortgagefraudblog.com.)

What exactly is mortgage fraud, and how did it become an epidemic in a nation of frenzied home buyers? According to Rachel Dollar, a Santa Rosa attorney representing institutional clients in mortgage-fraud cases and the creator of MortgageFraudBlog.com, a wide spectrum of people are involved in mortgage fraud, from clueless homeowners to organized criminals.

"There are different levels of criminality," she explains. "Some people claim they didn't know what they were doing is illegal. Others have already been convicted of securities fraud and other con schemes. They're professionals."

There are two basic kinds of mortgage fraud -- for property and for profit.

Dwek's properties were frozen in May after he was accused of bouncing a $25 million check at a PNC Bank branch in Eatontown. Dwek has since been charged by the FBI with criminal bank fraud, and his properties are in the process of being sold to pay his creditors. Many of the investors, including his uncle, claim Solomon Dwek swindled them. In all, including banks and other large lenders, Dwek's creditors claim they are owed more than $340 million. Dwek, 34, of Ocean Township, owns more than 350 properties that court-appointed fiscal agent Donald M. Lomurro has estimated to be worth as much as $400 million.

Koreyva said Dwek, 34, of Ocean Township, and Kara Homes were two of Amboy's five largest borrowers. Dwek, who is facing federal bank fraud charges, is being sued by lenders and creditors, including Amboy, for more than $338 million. Dwek has a real estate empire estimated to top $400 million.

Ah, it's going EXACTLY as I predicted 6 months ago. The builders are leading the market downward because:

1) They have no emotional attachment to their buildings2) They are in business to build houses3) Their profits once obscene, are still excellent event at 20-30% discounts4) The cost of lumber is plummeting also so the cost of building will also drop allowing the home builders to keep their margins.

To stay in office politicians can't do unpopular things. These two things are very unpopular

1) Raising taxes

2) Cutting spending on "programs" (things like Social Security and Medicare)

The only solution of least resistance that allows the government to stay in power is to inflate the money, that is to say, borrow from the future by issuing Treasury bonds in the trillions. This is fair in one way, everyone gets "taxed" equally.

In the end, the debt must be paid. The longer it is held off, the more severe the consequences but don't look for anyone willing to make the hard choice of fixing the problem. The economy will collapse at some point and those with significant debt will be entirely wiped out, homeless and penniless.

Granted that's a worse case scenario but I don't see any other possible solution. No one is willing to bend, so the economy will break.

In a Nutshell alleged Flight UA175, a Boeing 767-200, with four napalm bombs attached struck World Trade Center work areas as shown in this photo with full force igniting one napalm bomb inside a work area, shooting another napalm bomb and an engine through such a work area and out the back wall. That napalm bomb exploded past the wall and the engine landed in a NYC street.

The British consulate in Basra will evacuate its heavily defended building in the next 24 hours over concerns for the safety of its staff.

Despite a large British military presence at the headquarters in Basra Palace, a private security assessment has advised the consul general and her staff to leave the building after experiencing regular mortar attacks in the last two months.

The move will be seen as a huge blow to progress in Iraq and has infuriated senior military commanders. They say it sends a message to the insurgents that they are winning the battle in pushing the British out of the southern Iraqi capital, where several British soldiers have died and dozens have been injured.

Former Intelligence Agent Says Google In Bed With CIASteele also sounds off on 9/11 doubts

Paul Joseph Watson/Prison Planet.com | October 27 2006

A former clandestine services officer for the CIA who also maintains close relationships with top Google representatives says that the company is "in bed with" the intelligence agency and the U.S. government. He has also gone public on his deep suspicions about the official explanation behind 9/11.

Robert David Steele appeared on the nationally syndicated Alex Jones radio show and began by voicing his deep doubts about the official 9/11 story.

There are few threats to a democracy more serious than the possibility that the nation’s intelligence services would abuse their extraordinary powers and secretly influence the election of the nation’s leadership, in effect turning their clandestine skills for manipulating overseas events on their own country.

That is why Congress and Presidents have barred the Central Intelligence Agency since its founding in 1947 from operating domestically. It also explains why the core questions of the 1980 October Surprise case remain a sensitive mystery even today:

Did disgruntled CIA officers conspire with their former boss, George H.W. Bush, to exploit the Iranian hostage crisis in 1980 to defeat President Jimmy Carter whose policies had infuriated many CIA veterans? Did that secret CIA operation change the course of American politics, paving the way for a quarter century of Republican dominance?

On Nov. 4, 1980, after a full year of frustrating efforts to free the 52 American hostages held in Iran, Carter lost in a landslide to Ronald Reagan and his running mate, George H.W. Bush. The hostages were finally freed after Reagan was sworn in on Jan. 20, 1981.

While the full story is still unclear a quarter century later, the evidence leaves little doubt that former CIA Director Bush – first as a Republican presidential candidate and then as the party’s vice presidential nominee – supervised a team of bitter ex-CIA officers whose careers had suffered under Carter.

These ex-intelligence officers were so angry with Carter that they cast off their traditional cloak of non-partisanship and anonymity in 1979 and enlisted in the Republican drive to unseat the sitting President.

During Bush’s bid for the Republican nomination, these veterans of CIA covert operations worked as his political foot soldiers. One joke about Bush’s announcement of his candidacy on May 1, 1979, was that “half the audience was wearing raincoats.”

October Surprise

With little more than a month to go before the U.S. election, Republicans and Iranian representatives continued to meet in Washington. Indeed, one of the first public references to secret Republican-Iranian contacts was to a meeting at the L’Enfant Plaza Hotel supposedly in late September or early October.

Three Republicans – Allen, Silberman and Robert McFarlane, an aide to Sen. John Tower – have acknowledged a session with an Iranian emissary at the hotel. But none of them claimed to remember the person’s name, his nationality or his position – not even McFarlane who purportedly arranged the meeting.

In early October, Israeli intelligence officer Ari Ben-Menashe said he learned from superiors in Israel that Carter’s hostage negotiations had fallen through because of Republican opposition, according to his memoirs, Profits of War.

The Republicans wanted the Iranians to release the hostages only after the Nov. 4 election, Ben-Menashe wrote, with the final details to be arranged in Paris between a delegation of Republicans, led by George H.W. Bush, and a delegation of Iranians, led by cleric Mehdi Karrubi.

Also present, Ben-Menashe wrote, would be about a half dozen Israeli representatives, including David Kimche, and several CIA officials, including Donald Gregg and Robert Gates, an ambitious young man who was considered close to Bush. At the time, Gates was serving as an executive assistant to CIA Director Stansfield Turner.

Because foreclosures take time, usually at least 6 months behind in mortgage payments. Until the banks foreclose, houses cannot be sold at a lower price than the seller paid for the house.

In the first quarter of 2006, the median price of a U.S. home fell 3.3% from the fourth quarter of 2005. That means most of all of the 10 million houses bought since 2005 is under water, with a market value lower than their purchase price. Going forward, if house prices fail to rise less than inflation rate, or Fed funds rate (currently at 5.25%) and the Fed primary discount rate at 6.25% effect 6/29/06, the number of house below water will skyrocket. For the almost 40% house with no money down APR or Interest only mortgages, there is no room to lower asking prices as the sellor would not have enough proceeds from the sale to transfer title which is held by the mortgage bank. These house can only default and be foreclosed. That is 4 million houses. And the number will continue to increase as these foreclosure further bring the market down. Analysts have been saying that a house price drop of 10% and a fall in new starts of up to 25% are needed to rebalance supply and demand. A price drop of 10% will push the default line back to all purchases in 2004 or 03, when house price rose at 10% rate, which will add another 20 million houses to below water status. The impact on consumer power from the loss of wealth effect from home equity loans will be breathtaking. With Bernanke talking about inflation targeting set at between 1% and 2% of core CPI for the medium term 2-5 years, there will be a lot of financial Katrinas all over the economy even with a disaggregated housing market.

The blog topic about the new federal mortgage regulations seems to have just died. Why is that? In my opinion, these new regulations have the ability to rocket home prices back down to what is affordable to sane people. As of now, only people that are short-sided enough to negatively amortize their futures away can afford houses (at least afford them for a while). Once post-negative am resets/post-interest only resets have to be considered when granting the loan in the first place, these short-sided people won't be allowed to take prices to levels that sane people won't pay.

Does anyone know when these federal regulations begin? If they have begun, are they working?

Also, as I underestand it, these regulations only affect federally chartered banks. Who do we have to pressure to get these regulations to affect all financial institutions... state chartered banks and any other institution that handles loans? California regulators should be targeted for sure. Any ideas on how to go about this???

Looks like there are some parallels between the current state of housing, and the auto industry. Here are excerpts from today’s article. (Apologies for the caps - the Mammoth’s 2 cents.)--------------NEW YORK - Car buyers: get ready for deals. Coming soon are price cuts, an expansion of who is eligible for low-interest financing, and any other way your local car dealer can entice you into the showroom. -> PRICE DECLINES IN HOUSING, PRICE CUTS IN AUTOMOBILES.

The sell-off will be felt far and wide. It will sink Detroit's hopes for a quick return to profitability, pinch the economy in the nation's heartland, and shrink orders for component makers around the country. As a result, economic growth will be lower than expected late this year and early next year, economists believe.-> THE HOUSING SLUMP IS AFFECTING APPLIANCE & LUMBER SUPPLIERS, AUTO SLUMP WILL AFFECT SUPPLIERS OF CAR COMPONENTS.

"The auto industry will contribute to a slowing economy," says Peter Morici, an economics professor at the University of Maryland in College Park. "Slower auto sales will compound the negative affects of the housing slowdown and drag down growth."-> EVEN THE MSM IS BEGINNING TO SEE A CONNECTION BETWEEN HOUSING & AUTOS.

Last year, the auto industry sold close to 17 million cars and light trucks nationally. This year, its on pace for 16.5 million, says Mr. Zandi. "They have to make sure they don't fall below the 16 million unit pace. That is the absolute lowest level they can live with and not fall into bankruptcy." As of the end of September, it would have taken Chrysler 79 days to sell down its inventory, 76 days for General Motors, and 75 days for Ford, reports Autodata Corp. "Back in the old days, there was talk that 60 days' supply was normal," says Ron Pinelli, president of the Woodcliff Lake, N.J., company.-> DECLINING SALES VOLUME = INCREASING INVENTORY.

But this summer, as fuel prices spiked, consumers shied away from buying big SUVs. Even though gasoline prices have come down, consumers are skeptical. "People think the price of gasoline is going to go up again after the election," says Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla.-> IT ISN’T JUST THE HP’ers WHO BELIEVE GAS PRICES ARE BEING MANIPULATED. THE NEWS IS OUT - THIS GOVERNMENT HAS A CREDIBILITY PROBLEM.

For the complete news article, here is the link:http://news.yahoo.com/s/csm/20061030/ts_csm/aslowsales

The Commerce Department announced that Q3 GDP growth was 1.6%, a level not seen in three years when we were recovering from recession. Compared to a Street estimate of 2.0%, this led to a rise in bond prices, on the expectation of reduced Fed rates. Stocks declined as fear of recession mounted. There was even praise for the Fed for not increasing rates last Tuesday.

It could prove, as we said earlier this week, that this so-called "goldilocks" economy is in fact wearing a wig! Things are nowhere near as good as most market commentators say.

In its recent statements, the Fed has been keen to warn of mounting inflationary pressures. As we reported, well known outside commentators, such as former Fed Chairman Paul Volcker, have also cautioned on inflation, even hinting at political pressure to keep rates on hold.

In the face of these pressures and even published inflation above the Fed’s "comfort zone," the Fed has held rates.

Although we have been urging the Fed to pay far more attention to what we term as stealth inflation, we can understand why the Fed (with one dissenting vote) would want to hold rates as the November elections loom.

We also believe that, with its most sophisticated analysis and access to official information, the Fed, while perhaps not seeing the final figure, had at least a "strong indication" of the way things looked on GDP growth. We can now well understand that the Fed would not want to spook voters or the bond and stock markets at what looks increasingly like a most delicate economic turning point-a turning point where we believe we are facing not just recession but stagflation.

The 10-year bond now stands at a yield at some 60% of the Fed rate of 5.25 %. If the Fed had raised its key rate to 5.50% the differential to the 10-year bond would have risen to almost 1.00 %. Historically, such a wide differential has heralded recession.

[Editor’s Note: Hedge fund investing, our service that lets average investors in on the secrets strategies of billionaires, has bagged profits of 185%, 171%, 158% and more with interest rate plays.]

Today, CNBC announced that the fall in house prices had cut some one trillion dollars from the wealth of U.S consumers. The Fed knows that the "property centric" position of U.S. consumers is still uncertain. But, it remains a major concern.

So far, some 60% of the Dow 30 industrial component companies have reported quarterly earnings. A heartening 74% of them came in ahead of Wall Street estimates, with only some 15% disappointing on the downside.

This was good news, but the stock market hardly "roared" as it lurched to what the media describes enthusiastically as, "new record highs."

With geopolitical tensions having appeared to lessen of late. With oil having dropped considerably; with good figures on corporate earnings, jobs and on government revenues, why is it that the stock market has failed to roar?

We believe the market is secretly more concerned about inflation than most financial commentators admit. Every portfolio manager and private investor knows that inflation in his or her own personal expenses is way above the official CPI.

Despite the good news, investors are privately and increasingly concerned about inflation and a resultant rise in Fed rates.

Of course, readers of FIR and MoneyNews will know the CPI is based upon officially "cooked books" (the inflation lie), with a heavy bias to the downside. They will also realize that what the media now describes as new historic stock market highs are not what they appear.

Even discounting for official inflation, the Dow would have to reach some 14,000 to equal its January 2000 peak. To reach its 2000 peak, measured in terms of "real" money (gold) the Dow would have to reach some 23,000! Our readers will ask, "Then what sort of a record is a mere 12,000 on the Dow?"

We believe that an increasing number of investors share our concern about stealth inflation.

[Editor's Note: The government is manipulating inflation data. Read this free report.]

We believe the Fed faces an agonizing choice between stock markets entertaining low morale, the increasingly clear prospect of a slowing economy and the outlook for increasing inflation, even measured by the official CPI. We believe the reality is worse, much worse, as stealth inflation is far higher than most investors, businessmen or politicians can face, without panic.

In short, we feel the Fed is staring right into the face, not of a soft or hard economic landing, but of the most worrying of economic conditions, that haunted us in the 1970’s-STAGFLATION!

So what will the Fed do? We think the Fed will hold rates until after the election. Then, it will gradually raise rates, while talking markets up.

As we go to print, the new Treasury Secretary, Henry Paulson, has just been interviewed on CNBC. To one early question, he replied, "Well, I’m certainly no political expert. …" He then went on to talk up the dollar, the U.S. economy and financial markets in a masterfully political manner. [You don’t rise to the top of a modern investment bank, like Goldman Sachs, without a great expertise in politics!]

Interestingly, Mr. Paulson is now in charge of the most important "President’s Working Group." This group, sometimes referred to as the "Plunge Protection Team", included the heads of the Federal Reserve, Securities and Exchange Commission and the Commodity Futures Trading Commission.

A major Wall Street Journal article (Oct 23) described this committee as, " a significant lever of influence outside the Treasury bailiwick," The article went on to quote Rob Nichols, a former Treasury spokesman as saying This committee is, " where he [Paulson] can shape the debate," on keeping the U.S. economy and capital markets competitive.

According to the article, Mr. Paulson has stepped up activity on this important committee very considerably.

We feel this increased emphasis is well advised in order to cope with the troubled economic time we see looming ahead - a time when markets could easily become spooked and panic.

New York -- The Dixie Chicks are again at the centre of a controversy over the limits of opinionated talk. Weinstein Co., which is distributing the film, said late last week that NBC wouldn't accept an advertisement for Shut Up & Sing, a movie about the fuss created by Dixie Chick Natalie Maines' comment that she was ashamed President Bush was a fellow Texan. The network suggested the complaint may be a publicity stunt.

The ad includes footage of the Iraq War, gives a brief background on Maines' 2003 comment made onstage in London, and shows Maines dismissing as "dumb" a comment made by Bush about the Dixie Chicks.

CBS has agreed to air the ad. ABC and Fox have not given an answer, while the CW and NBC rejected it. The film distributors said NBC explained it was because the ad disparaged President Bush.

Alan Wurtzel, head of standards and practices at NBC, said it is the network's policy not to accept ads on issues of public controversy -- like abortion or the war. AP

Report from Kansas - I witnessed auction of 80 acres plus 3BR 2BA brick house (1992) w/ two large sheds & pond for $265k. Locals tell me the house accounts for over $200k of that. This was 1.5 hours south of Kansas City. That would be a little high for that location, but not bubblicious. Lots of family farms around there, but it continues to be tricky. This was a good year for wheat.

On local news this morning, third house fire in three days in Kansas City. New-looking McMansion burnt to a crisp with no one injured. No mention as to arson investigation, and I don't know how they are doing vis-a-vis foreclosures in KC, but still...

Brad Will, New York Documentary Filmmaker and Indymedia Reporter, Assassinated by Pro-Government Gunshot in Oaxaca While Reporting the StoryPhotographer Oswaldo Ramirez of the Daily Milenio Wounded in Attack by Shooters for Ulises Ruiz Ortiz in Santa Lucia del Camino

Now, Keith, how about a thread for us classic car fans? How about “Classic Cars as Investment Vehicles?” No relationship to housing, you say?

Will the stretched-out financially mcmansion homedebtors put grandpa’s Edsel up for sale in order to make the monthly mortgage payment? Will the market soon be flooded with these beauties as people dump them for some much-needed cash?

Or will people abandon their stocks & bonds and start snapping these up as an investment?

Hmm...maybe I should haul my ’66 Pontiac Lemans Sprint Six out of the barn, scrape the swallow sh*t off of it, polish ‘er up and put a “for sale” ad in the local paper...

ABU DHABI — The UAE Central Bank may cut its US dollar dominated reserves by up to 90 per cent and is looking at other currencies such as the yen, euro and sterling, Sultan Nasser Al Suwaidi, Governor, Central Bank of the UAE, said yesterday. However, he did not elaborate on the topic further.

"The bank hopes to lower the dollar share of its foreign currency reserves to a range of between 50 per cent to 90 per cent," Al Suwaidi said. At present, he said 98 per cent of the bank's reserves holdings are in US dollars. The foreign currency reserves of the UAE currently stand at over $25 billion. The Central Bank is yet to convert 10 per cent of the total reserves into euros and gold, a decision it took earlier this year.

"It is our investment policy to diversify the reserves. There are euro, yen and sterling... We are still waiting for the appropriate time and circumstances, " Al Suweidi told reporters at a briefing after the conclusion of the two-day conference of GCC central bank governors and head of Monetary agencies in Abu Dhabi.

The GCC central bankers meeting discussed sovereignty matters relating to monetary union. It agreed that an explanatory note shall be forwarded, showing the sovereignty concessions GCC members states will make in case the monetary union is approved. This will include drawing up and implementation of monetary policy, issuance of the unified currency and determining exchange rate policy, approval of the legislation relating to the Union requiring amendments to the national banking, financial and monetary rules and regulations in line with the GCC framework.

HiI just read an article off the smirking chip about the status of the US dollar and where it seems to be heading (down the toilet) and it had a lot about the housing bubble and what everyone has been reading about in this blog. But its a political newsource and it nicely sums up as well as expounds upon many topics here. Its at www.smirkingchimp.com/node/2451I dont know how to do the tinyurl, but if you just go to the site, its on todays headlines so wont be hard to find. Guess its our own private trick or treat!

In 2005, National Association of Realtors Chief Economist David Lereah released the book,"Are You Missing the Real Estate Boom? Why Home Values and Other Real Estate Investments Will Climb Through the End of the Decade - and How to Profit From Them."

Interestingly, the title for the 2006 edition of the book was changed to,"Why the Real Estate Boom Will Not Bust - and How You Can Profit From It."

Below are Minyanville's suggestions for subsequent title revisions in later editions of Lereah's book through 2015:

2007: "Why the Real Estate Boom Will Not Bust and How Foreclosures are Technically Part of the Continuing Real Estate Boom, In a Way."2008: "Why the Real Estate Boom in Distressed Properties Will Not Bust (except in certain local markets) and How You Can Use Leverage to Profit From It." 2009: "Why the Phrase "Real Estate Boom" is Often Misunderstood to Mean Higher Prices and How You Can Pray for Them." 2010: "Why the Real Estate Boom Will Soon Bounce Back and How to Eventually Profit From It."2011: "Why Did I Have to Write "The Real Estate Boom Will Not Bust Through the End of the Decade" and How Did I Not Realize How Long A Decade Really Is?"2012: "Oh, Dear God, Please, Please Let the Real Estate Boom Bounce Back... and How You Can Profit From It."2013: "Please, Please, Just Let the Real Estate Boom Come Back This One Time for This One House and How You Can Break Even From It."2014: "Why I Am Willing to Accept a Small Loss of 35% On the Real Estate Boom and No Longer Care About How to Profit From It."2015: "Why Can I Maybe Borrow a Couple Dollars Off You Until the Real Estate Bust is Over?"

Brad Will, New York Documentary Filmmaker and Indymedia Reporter, Assassinated by Pro-Government Gunshot in Oaxaca While Reporting the StoryPhotographer Oswaldo Ramirez of the Daily Milenio Wounded in Attack by Shooters for Ulises Ruiz Ortiz in Santa Lucia del Camino +++++++++++++Mexico is being completely overrun with drug cartels. If we have another Great Depression and the illegal immigrants have to return home, I predict the whole country of Mexico will explode in violence....

Mexico is being completely overrun with drug cartels. If we have another Great Depression and the illegal immigrants have to return home, I predict the whole country of Mexico will explode in violence.... +++++++++++++Speaking of housing, I don't think now is the time to sell out and buy a home in Mexico. You could be looking at a very short retirement....

Talk show host Alex Jones’ brief interview last week with an unknown caller has sent constitutionists and legal researchers scurrying for the law books.

“The Military Commission Act is not law!” the man barked. “The ‘pocket veto’ clause of the constitution has already nullified it.”

He then pointed out to the national radio audience exactly what the part about “pocket veto” in Article One, Section 7 of the U. S. Constitution means. Indeed, it appears that President Bush’s signing of the infamous “6166,” which in effect eliminates the 4th Amendment protection of citizens in their homes and a whole lot more, is moot. He was too late.

Now Jones and many others are wondering, who in an official capacity is going to point this out and enforce it?

Here is what the law says and what happens when a sitting president sticks a bill passed by congress into his pocket instead of signing it and sending it back:

A Pocket Veto occurs when the President fails to sign a bill within the 10 days allowed by the Constitution.

Congress must be in adjournment in order for a pocket veto to take effect.

If Congress is in session and the president fails to sign the bill, it becomes law without his signature.

Now to the current specifics.

From the U.S. Constitution Article 1, Section 7: “…If any Bill shall not be returned by the President within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall be a Law, in like Manner as if he had signed it, unless the Congress by their Adjournment prevents its Return, in which Case it shall not be a Law.”

Since Congress cannot vote while in adjournment, a pocket veto cannot be overridden. A pocket veto is a legislative maneuver in American federal lawmaking. The U.S. Constitution requires the President to sign or veto any legislation placed on his desk within ten days (not including Sundays). If he does not, then it becomes law by default. The one exception to this rule is if Congress adjourns before the ten days are up. In such a case, the bill does not become law; it is effectively, if not actually, vetoed. Ignoring legislation, or “putting a bill in one’s pocket” until Congress adjourns is thus called a pocket veto.

Congress passed 6166 on September 29th, presented it to the President on October 10th, and adjourned on October 13th. Bush signed it on October 17th, the week after Congress had adjourned, thereby rendering it “vetoed” by constitutional standards.

Hmmm...here's a woodleif that served in the confederate army to enforce slavery, you must be proud.

http://www.contractors.com/profile/4163455

This link describes a woodlief as having attended the catholic Church of St. Peter and St. Paul in England.

http://www.geocities.com/Heartland/Bluffs/4579/woodfam.html

But of course! It all makes sense now. Your hateful diatribe failed to mention catholics. Since you will not reveal your heritage, would it be correct to deduce that you are catholic and white with english ancestors who served in the confederacy?

It is a common for some catholics with english surnames to spew really hateful filth. If you are not catholic, then what? You must be ashamed to admit. Whatever you are, anybody with the woodlief name will thank you for vomiting your infected soul on the internet, you despicable wad of tuberculotic sputum.

For an unfortunate few, retreating prices in the housing market could add up to real pain. But overall, the long-due cooling of this scorching market is positive.The National Association of Realtors reported last week that home sales were down in September 1.9 percent, year-over-year, the sixth straight month of decline. More significantly, house prices actually fell 2.5 percent compared to 12 months ago.No doubt, some homeowners will be rattled. Actual declines in housing values are rare, and many people make financial decisions on the assumption that the value of their homes will only increase.For most, this correction will have only a psychological impact. One might feel wealthier if they're in, say, a $315,000 house rather than a $290,000 home, but fixed-rate mortgage payments aren't going to change, and values will eventually edge back up.True, some people have no choice but to sell in this market, but for most, that merely means a smaller gain, not an actual loss. Only those having to sell after having bought at the market's recent peak are apt to suffer in real terms. (Also of concern are people who took out adjustable-rate mortgages that are growing beyond their means.)The upside of this shakeout will have a wider impact. For several years, home prices have been growing faster than incomes, and that's simply not sustainable. Along the way, many first-time home buyers were priced out of the market.The falling prices should help more people get into a house, especially if they shop for a deal among the many motivated sellers out there today.Another positive outcome is the lesson this correction teaches about personal finance. Windfalls are rare and usually fleeting. The best strategy is one that emphasizes living within one's means, avoiding credit-card debt and saving and investing in a conservative way.

The Palestinians are a phoney ethnic group. They are a bunch of criminal, knuckle-dragging, savages that are the dregs of Arab-Muslim society. The reason they live in Palestine is because other Arab countries won't let these guys into their societies to ruin them. They are recognized by other Arabs as the Arab-trash they are.

Saw the show last night. Premise is that Bush and Chaney have been on a purposeful power play/struggle with Congress and the Supreme Court from day one. The President and Vice President have ignored the checks and balances in our Gov. to place the Oval Office in a Sole Authority with a “MY way or the highway” philosophy.

CNN comments are that they fear the next President may not be so Judicious with the Power in the presidential titles, thanks to the precedence set by these two. Interview with detainees, and a Military Attorney who sued the Gov. on behalf of the Gitmo detainee, and won and Individual Lawmakers who are very concerned about the two running ram rod over our Constitution. Keep in mind the President and the Military swear an oath to protect the Constitution of the USA not the President of the USA. Several people in the ‘political game’ in different Government roles, who are not afraid to speak out, point this out.

A friend told me he just tried to refinance an ARM from hell loan. He said he tried to get a fixed rate. The lender came back to him and said he didn't have enough equity. When he checked on it, it turned out the lender was using a new real time computer appraisal system, ehich said his house was worth $550k, and it had just appraised for $750k in Feb. '06. So he can't get the loan, no equity, to rid himself of the loan from hell. Has anyone else heard of this new appraisal system?

Like I said folks, watch the stock market. This is the other shoe. When it drops your going to have REAL panic. Right now Home Owners are retreating to their fund balances and consoling themselves in the performance of their hedge funds.

Its about to come to an end and with housing heading south and THEN STOCKS there will be no where left to hide.

DO NOT BLAME KEITH. BLAME GREENSPAN. He replaced one bubble with another. Also blame the general public. They were dumb enough to bite.

You are right! The stock market just doesn't get it! It's another bull trap, like 1999-2000, and it's going to get a lot of suckers in this suckers rally. The smart money is selling, and getting ready to short! Does one want ot be smart or toast?

Wow....Richard you need to go back to your doctor and get your med check done soon. It seems the meds they have you on now aren't working anymore. Maybe about 14 grams of lead between the eyes might cure your neurosis. Dude you are a total waste of air and food.

And to quote you, "foxwoodleif is typical of the loud arrogant swine that spew their hate from the cowardice of anonymity.

foxwoodleif: what is your heritage? You must be ashamed to admit your heritage, you bastard son of uncouth ancestry. What would your family say if they knew about you, pig?"

First, it Woodlief, not Woodleif. Second, where do you get off saying I spew hate? Throughout all of Keiths subjects when people spew hate against Jews, Muslims, Mexicans, I write how wrong those racist attitudes are. Exactly what offends you?

What is YOUR race or religion? As far as my ancestory? On my father's side, English and German. My father's first ancestor to come to the new world was Capt. John Woodlief in 1609. He mother was a cousin to the queen. His father lost his money and lands gambling so the only way the son could retain his title was to take a land grant in Virginia colony and come to the new world. His sailing was delayed six months so he missed being massacred at the Shirley plantation and when they arrived to join the first sailing found all the settlers dead. Most Woodliefs are southerners and yes had plantations. I'm sure they owned slaves and probably intermingled with slaves like most people of that era for which slavery was not unique to just southern whites.

My mom's family is even more interesting. Originally a jewish family from Spain who during the inquisition migraged to Holland and eventually was absorbed into the christian community. In the mid-1800s they came to the USA where my mom's great grandfather married a Cherokee woman in Oklahoma. Needless to say after a few more generations of being Americans and intermarrying my immediate family line includes asian, mexican, indian, german, english, welsh, danish, to mention a few family descendants. I personally am English, Dutch, German, Cherokee (and I guess since the Dutch was mixed with Spanish in the 1500s hispanic). Most of my nieces and nephews and their kids are a mixture of the rest.

Religion? Definitely not catholic. My father was a southern baptist turned agnostic at 16. My mom was evangelical. Their kids were not raised in any religous environment and were allowed to choose once they became adults. I studied most christian sects from catholic to Jehovah witness and everything in-between. Buddhism, Islam, and Judaism. I consider myself an atheist.

I don't live in a utopian fantasyland (mr annonymous) and even if I wish for and strive for a world that values justice and tolerance for all I fully understand that "power corrupts" and that religions, institutions, governments and individual humans will always fail in achieving those goals.

Thank you fellow Human/Monkey Mutant Blogger.I book marked that page for sure! Gotta show the children.I am so busy keeping up with HP that I buy the cupcakes at the bakery, rather than bake em though. he he

Thursday, November 2, 2006Vol. 8 No. 219In Today's Letter:Comment: Permission to Leave the U.S.?Sovereignty: The Fences Between UsWealth: Con Artists At the Central BanksNow You Need Permission toExit or Enter the Country?

Today's comment is by Mark Nestmann, our Wealth Preservation & Tax Consultant and President of The Nestmann Group.

Dear A-Letter Reader:

Forget no-fly lists. If Uncle Sam gets its way, beginning on Jan. 14, 2007, we'll all be on no-fly lists, unless the government gives us permission to leave-or re-enter-the United States.

The U.S. Department of Homeland Security (HSA) has proposed that all airlines, cruise lines-even fishing boats-be required to obtain clearance for each passenger they propose taking into or out of the United States.

It doesn't matter if you have a U.S. passport-a “travel document” that now, absent a court order to the contrary, gives you a virtually unqualified right to enter or leave the United States, any time you want. When the DHS system comes into effect next January, if the agency says “no” to a clearance request, or doesn't answer the request at all, you won't be permitted to enter-or leave-the United States.

Consider what might happen if you're a U.S. passport holder on assignment in a country like Saudi Arabia. Your visa is about to expire, so you board your flight back to the United States. But wait! You can't get on, because you don't have permission from the HSA. Saudi immigration officials are on hand to escort you to a squalid detention center, where you and others who are now effectively “stateless persons” are detained, potentially indefinitely, until their immigration status is sorted out.

Why might the HSA deny you permission to leave-or enter-the United States? No one knows, because the entire clearance procedure would be an administrative determination made secretly, with no right of appeal. Naturally, the decision would be made without a warrant, without probable cause and without even any particular degree of suspicion. Basically, if the HSA decides it doesn't like you, you're a prisoner-either outside, or inside, the United States, whether or not you hold a U.S. passport.

The U.S. Supreme Court has long recognized there is a constitutional right to travel internationally. Indeed, it has declared that the right to travel is "a virtually unconditional personal right." The United States has also signed treaties guaranteeing “freedom of travel.” So if these regulations do go into effect, you can expect a lengthy court battle, both nationally and internationally.

Think this can't happen? Think again…it's ALREADY happening. Earlier this year, HSA forbade airlines from transporting an 18-year-old native-born U.S. citizen, back to the United States. The prohibition lasted nearly six months until it was finally lifted a few weeks ago.

Nazi Germany and the Soviet Union are two countries in recent history that didn't allow their citizens to travel abroad without permission. If these regulations go into effect, you can add the United States to this list.

For more information on this proposed regulation, see http://hasbrouck.org/IDP/IDP-APIS-comments.pdf .

I sold my house this summer. I am not yet shor. But the retail sales and slowing GDP numbers tell me we should be short soon! I believe that gold is going to make a nice move. Could break $700 and then up. The weak dollar and huge demand from India, China, Russia and the middle east will out pace production.

Alex Jones' Terror Storm documentary is shooting up the Amazon DVD sales charts and has now broken into the top 60.

A lofty position on the Amazon.com sales chart ensures an increased exposure of Terror Storm to more mainstream audiences, and subsequently those who are still shadowed from the truth about the history of government sponsored terror.

UPDATE: Terror Storm is now at 57 and climbing every hour! It is more popular than such titles as The New Adventures of Superman, CSI Miami and Boston Legal and is the only non-fiction documentary in the top 60 bar Al Gore!

"Nazi Germany and the Soviet Union are two countries in recent history that didn't allow their citizens to travel abroad without permission. If these regulations go into effect, you can add the United States to this list."

I was afraid this would happen! They use the War Against Terror to implement some "Big Brother" dragonian laws to make use the "slaves of the corporate state". Don't be surprised if the poor guy down the block who defaults on his usary ARM or interest only rip off loan is barred from overseas travel! This reminds me of the National Socialist treatment of people in Nazi Germany. Guaranteed profit for the corporations, and Darwinian Capitalism for the "slave" masses. Boss can I have permission to travel? Denied you owe too much on your visa card, and may not come back. We already have the international element with troops in Iraq and Afganistan.

Don't be surprised if the poor guy down the block who defaults on his usary ARM or interest only rip off loan is barred from overseas travel!+++++++++++We're close to this already. I just got a new passport and had to give them my Social Security Number. Apparently, if you owe back taxes, you can't get your passport renewed, which means basically you can't leave the country.

What is with the ads on this site that promote buying homes in Austin or other places and loans? Why would Keith promote ads that are contrary to his view of a house bubble? Is it because this site is really about making money and not being an unbiased source of trends in the real estate market?

Hi thereIf you read the housingbubbleblog you've already seen my comment, but I thought I'd post here as well. Did you hear the story on NPR today at the end of Morning Edition where they said that last month saw the highest number of HELOC's taken out in 16 years!!! They said some other incredible number like 9/10 mortgages were really for HELOCS and not for a new home. My question is this, if the housing bubble is popped or at least deflating, on what are they borrowing money against, especially if their home value is not going up? Also, the housingbubbleblog had a bunch of people commenting on how quiet it seems at Home Depot these days. So if they are not spending their 5% taken out from their home equity on granite and lumber what is it going for, the mortgage payment? Very interesting...

Hamsterhouse: People are squirreling away the money so when they declare bankruptcy, they can go dig up the $200K of gold and silver coins paid for with HELOC money and retire to their trailer park in the Sierras.

Hell, if I had a McMansion and a crappy job, I'd do this too. Who would not want to retire on some else's nickel? But, alas, I don't have a McMansion.

I was talking to a friend who use to live here, and an american. He is now a Swiss citizen. I told him about the changes due to national security, and he pointed out that all the security infringements were on honest U.S. citizens. But we still have millions of illegals crossing the border, and no one seems to care. What's up with that? He said that it would be easy for the bad guys to sneak across the border strapped with destruction, but check out that over weight CPA from Chicago he must be up to something? Maybe he owes back taxes! Who are these laws meant to control, honest americans! Last time I checked there were no fat middle class americans or grandmas blowing themselves up!

All of the above can apply to both liberals and conservatives. You must have limited experience of the real world. In particular, environmental concern crosses the spectrum, with curmudgeonly factory owners the only remaining nay-sayers. Wise up, troll-boy.

Mortgage fraud frenzyThe real estate market has never offered such opportunity for graft. Since the housing market started to soar in 2001, mortgage fraud has become the fastest-growing white-collar crime, according to the FBI. Last year crooks skimmed at least $1 billion from the $3 trillion U.S. mortgage market.

Now that the market is slowing, fraud is only rising. As business dries up, there's increasing pressure on lenders, brokers, title companies and appraisers to be profitable. That means loan and title documents aren't scrutinized as carefully as they might be, and courts - many of them so low-tech they resemble Mayberry - can't keep up with the volume of paper.

Then there's the mad rush to sell, particularly by people who paid high prices for homes and suddenly can't afford the mortgages.

It's like a tasting menu for con artists and grifters, so tempting that in some cities drug dealers have turned to mortgage fraud, plaguing lower-income neighborhoods with crooked mortgages rather than crystal meth.

The Treasury Department's Financial Crimes Enforcement Network, known as FinCen, on Friday released its first report on mortgage loan fraud. The agency undertook the review after seeing a significant rise in the number of so-called suspicious activity reports it received from U.S. banks that concerned mortgage loan fraud.

So Ted Haggert is alleged to be gay. My, my, those right wing republicans, or should I say closet democrats?

So he bought the meth but didn't inhale....gosh, "I didn't have sexual relations with that woman." Related to Clinton? Is Hillary really a lesbian as rumored?

From what I've read about meth users and gays he is most likely a bottom. At least he takes it like a man (g). Or was he just out proving he wasn't gay? You know, have sex with an escort, hate it, use drugs to cope with the experience, and go back to church and preach about the evils first hand?

Who needs a housing meltdown when you've got the Republican right wing melting down?

Richard Lucas, Kimberly Castle, and Kenneth Stalnaker face federal charges of bank and wire fraud in the alleged scheme in which distressed properties were purchased, the value was inflated through appraisals, then the properties were sold at a higher value, with participants taking the profits.

Central banks and private investors are beginning to shift holdings from the dollar to the euro, former U.S. Federal Reserve Board chairman Alan Greenspan said.

"We're beginning to see some move from the dollar to the euro, not only in the private sector, but by monetary authorities, by central banks," Greenspan, right, said at the Commercial Finance Association convention in Washington, D.C. Greenspan said the move is due to a desire to diversify after a concentration of global investment in U.S. assets. That was the result of a perception that the U.S. was the best place to invest, he said.

Greenspan said growth of the U.S. trade and budget deficits isn't a problem and reflects "the fact the whole world is basically expanding."

"Enviro-fascist"??? Look, Bub, all I am talking about are proven facts. Not a peep was said about what ought to be done. Not sure anyone knows. There is a great and growing Business Opportunity in building a whole new sustainable technology. Is that Capitalistic enough for you? Facts indicate it may be too late to do the things that would have made a difference. And however might it have come to this, I wonder? Hint - the free market had three decades to get cracking on this and FAILED.

Environmental degradation is going to be the primary cause of massive poverty, you brainiac. Hurricane Katrina was just a little appetizer. There is a mountain of evidence to support my opinions. And yours?

The housing bubble collapse will seem insignificant in comparison to the other wammies about to be dealt. Whether you are liberal or conservative is of no consequence to the Laws of Nature. I wish some conservative enviros would chime in, because, unbeknownst to you, there are many.

Comments by Mark Nestmann, our Wealth Preservation & Tax Consultant and President of The Nestmann Group.

Dear A-Letter Reader:

Forget no-fly lists. If Uncle Sam gets its way, beginning on Jan. 14, 2007, we'll all be on no-fly lists, unless the government gives us permission to leave-or re-enter-the United States.

The U.S. Department of Homeland Security (HSA) has proposed that all airlines, cruise lines-even fishing boats-be required to obtain clearance for each passenger they propose taking into or out of the United States.

It doesn't matter if you have a U.S. passport-a travel document that now, absent a court order to the contrary, gives you a virtually unqualified right to enter or leave the United States, any time you want. When the DHS system comes into effect next January, if the agency says no to a clearance request, or doesn't answer the request at all, you won't be permitted to enter -- or leave -- the United States.

Consider what might happen if you're a U.S. passport holder on assignment in a country like Saudi Arabia. Your visa is about to expire, so you board your flight back to the United States. But wait! You can't get on, because you don't have permission from the HSA. Saudi immigration officials are on hand to escort you to a squalid detention center, where you and others who are now effectively stateless persons are detained, potentially indefinitely, until their immigration status is sorted out.

Why might the HSA deny you permission to leave-or enter-the United States? No one knows, because the entire clearance procedure would be an administrative determination made secretly, with no right of appeal. Naturally, the decision would be made without a warrant, without probable cause and without even any particular degree of suspicion. Basically, if the HSA decides it doesn't like you, you're a prisoner --- either outside, or inside, the United States, whether or not you hold a U.S. passport.

The U.S. Supreme Court has long recognized there is a constitutional right to travel internationally. Indeed, it has declared that the right to travel is "a virtually unconditional personal right." The United States has also signed treaties guaranteeing freedom of travel. So if these regulations do go into effect, you can expect a lengthy court battle, both nationally and internationally.

Think this can't happen? Think again: it's ALREADY happening. Earlier this year, HSA forbade airlines from transporting an 18-year-old native-born U.S. citizen, back to the United States. The prohibition lasted nearly six months until it was finally lifted a few weeks ago.

Nazi Germany and the Soviet Union are two countries in recent history that didn't allow their citizens to travel abroad without permission. If these regulations go into effect, you can add the United States to this list.

For more information on this proposed regulation, see http://hasbrouck. org/IDP/IDP- APIS-comments. pdf .

Six Arab states join rush to go nuclearBy Richard Beeston, Diplomatic EditorAlgeria, Egypt, Morocco, Tunisia, UAE and Saudi Arabia seek atom technologyTHE SPECTRE of a nuclear race in the Middle East was raised yesterday when six Arab states announced that they were embarking on programmes to master atomic technology.

The move, which follows the failure by the West to curb Iran’s controversial nuclear programme, could see a rapid spread of nuclear reactors in one of the world’s most unstable regions, stretching from the Gulf to the Levant and into North Africa.

The countries involved were named by the International Atomic Energy Agency (IAEA) as Algeria, Egypt, Morocco and Saudi Arabia. Tunisia and the UAE have also shown interest.

All want to build civilian nuclear energy programmes, as they are permitted to under international law. But the sudden rush to nuclear power has raised suspicions that the real intention is to acquire nuclear technology which could be used for the first Arab atomic bomb.

“Some Middle East states, including Egypt, Morocco, Algeria and Saudi Arabia, have shown initial interest [in using] nuclear power primarily for desalination purposes,” Tomihiro Taniguch, the deputy director-general of the IAEA, told the business weekly Middle East Economic Digest. He said that they had held preliminary discussions with the governments and that the IAEA’s technical advisory programme would be offered to them to help with studies into creating power plants.

Mark Fitzpatrick, an expert on nuclear proliferation at the International Institute for Strategic Studies, said that it was clear that the sudden drive for nuclear expertise was to provide the Arabs with a “security hedge”.

“If Iran was not on the path to a nuclear weapons capability you would probably not see this sudden rush [in the Arab world],” he said.

The announcement by the six nations is a stunning reversal of policy in the Arab world, which had until recently been pressing for a nuclear free Middle East, where only Israel has nuclear weapons.

Egypt and other North African states can argue with some justification that they need cheap, safe energy for their expanding economies and growing populations at a time of high oil prices.

The case will be much harder for Saudi Arabia, which sits on the world’s largest oil reserves. Earlier this year Prince Saud al-Faisal, the Foreign Minister, told The Times that his country opposed the spread of nuclear power and weapons in the Arab world.

Since then, however, the Iranians have accelerated their nuclear power and enrichment programmes.

Nuclear steps put region on brink of most fearful era yetBy Richard BeestonThe Middle East is poised for a headlong rush into a new age. The players, their motives and the risks are analysed by our correspondentIT IS one of the world’s most unstable regions, where conflicts over land, ideology and religion have raged for centuries.

Yet the Middle East may now be entering the most precarious era of its history, with the sudden rush by Arabs, Iranians and Turks to master nuclear technology and one day unlock the secrets to the atomic bomb.

Yesterday’s disclosure that Algeria, Egypt, Morocco, Saudi Arabia and smaller states such as Tunisia and the UAE want to acquire nuclear technology was suspected for some time, but the headlong race into the atomic age came as a shock.

For months Arab leaders have been speaking out against nuclear proliferation in the region. Most wanted a nuclear-free zone to force Israel to give up its nuclear arsenal and to discourage Iran, which is pursuing a controversial atomic programme many suspect will give the regime a nuclear weapons capability.

But the calculations in the region changed dramatically this year. A Six Arab states join rush to go nuclearNuclear steps put region on brink of most fearful era yet

Treaty is left in shreds by new raceDead in the street: women who were called out to shield gunmenGaza's pain: 'We're bored of this life and want to die'

Iran has already successfully launched several dozen long-range missiles during large-scale military exercises, codenamed Great Prophet, which are taking place November 2-12 in southern Iran, and involve ground units, the Air Force, Navy and Basij (militia) forces.

Richard- The info you gave about Iran is disturbing. They can block the Straits of Hormutz with those missles. There goes oil to $150 a barrel. That is one of the reasons, along with other geo-political concerns, that I'm buy gold mutual funds. Hard assets for now. Just wait and see what happens to the stock market when the Demos take the House and Senate. And the other shoe hasn't dropped yet for house too. Also the nuc. weapons it the hans of the N. Koreans and other middle east countries is just plain scary.

In a stealth maneuver, President Bush has signed into law a provision which, according to Senator Patrick Leahy (D-Vermont), will actually encourage the President to declare federal martial law (1). It does so by revising the Insurrection Act, a set of laws that limits the President's ability to deploy troops within the United States. The Insurrection Act (10 U.S.C.331 -335) has historically, along with the Posse Comitatus Act (18 U.S.C.1385), helped to enforce strict prohibitions on military involvement in domestic law enforcement. With one cloaked swipe of his pen, Bush is seeking to undo those prohibitions.

Public Law 109-364, or the "John Warner Defense Authorization Act of 2007" (H.R.5122) (2), which was signed by the commander in chief on October 17th, 2006, in a private Oval Office ceremony, allows the President to declare a "public emergency" and station troops anywhere in America and take control of state-based National Guard units without the consent of the governor or local authorities, in order to "suppress public disorder."

DUBAI - At least six Arab countries are developing domestic nuclear power programmes to diversify energy sources, a Middle East economic magazine reported on Saturday.

Saudi Arabia, Egypt, Morocco and Algeria have shown interest in developing nuclear power primarily for water desalination, the Middle East Economic Digest (MEED) quoted Tomihiro Taniguchi, deputy director-general of the Vienna-based International Atomic Energy Agency (IAEA), as saying.

‘We held preliminary discussions with these governments. We will offer them help under our technical advisory programme to conduct a study for the power plants,’ he was quoted as saying, adding that the interest the four nations had shown was ‘at a tertiary stage’.

The United Arab Emirates and Tunisia have also shown interest in nuclear power, but their plans are at an infant stage, the magazine said.http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/middleeast/2006/November/middleeast_November63.xml§ion=middleeast

Power cuts strike western Europe Power cuts have struck several countries in western Europe, leaving millions of people without electricity. Power companies said the outage started in Germany with a surge in demand prompted by cold weather, and then spread to other parts of Europe.

Some five million people in France lost power, mainly in the east of the country and including parts of Paris.

"We weren't very far from a European blackout," a senior director with French power company RTE said.

In 59BC, Julius Caesar declared he was so shocked by the incursions of the dangerous Helvetii tribe into Gaul, and the suffering of the Gaulish peoples, that he had himself appointed 'protector of the Gauls'. By the time he'd finished protecting them, a million Gauls were dead, another million enslaved and Julius Caesar owned most of Gaul. Now I'm not suggesting there is any similarity between George W Bush's protection of the Iraqi people and Caesar's protection of the Gauls.

For a start, Julius Caesar, as we all know, was bald, whereas George W Bush has a fine head of hair.

In any case, George W Bush is not personally making huge amounts of money out of it. The money-making is all left in the capable hands of companies like CACI International, Blackwater Security and Haliburton.

It's true that Vice-President Dick Cheney's stock options in his old company, Haliburton, went up from $241,498 in 2004 to $8m in 2005 - that's an increase of 3,281 per cent.

But then Dick Cheney is bald.

The point I'm trying to make is that there is absolutely no comparison to be made between Julius Caesar's invasion of Gaul in 58-50BC and George Bush's invasion of Iraq.

I only know the calculation from the year 2000, and it would be about a 25% drop. Housing prices historically have risen by 1% or so more than the stated inflation...at an average of 5%. But the boom technically started in 96, in most areas from what I understand. It just started getting insane in 2000, with double digit increases. There is a great website with all kinds of data and graphs, that I have read...I will see if I can find it and will post here.

I'm sorry, I can't find the website...but if you're a newbie to the real estate bubble concept. Then go to www.wikipedia.com and enter "real estate bubble",in the search box, read all the articles and you will be "in the know". Good luck!

This is true in my market of south florida as well. however many mags have also declared vero beach which is mid florida as one of the countries next hot spots with home prices excpeted to rise up to 72% in the next year

This is true in my market of south florida as well. however many mags have also declared vero beach which is mid florida as one of the countries next hot spots with home prices excpeted to rise up to 72% in the next year

James and Eric Byrd admitted Friday that they defrauded seven banks through false mortgage information and bad checks. The banks lost between $2.5 million and $7 million, according to their plea agreements

James and Eric Byrd admitted Friday that they defrauded seven banks through false mortgage information and bad checks. The banks lost between $2.5 million and $7 million, according to their plea agreements

Bobby Young looks at the headlines and TV talk about a significant slowdown in the real estate market and shakes his head.

Is it happening in Great Falls? No way, says Young, a real estate broker with ReMax of Great Falls.

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The local home market's best days are likely in the future, not the past, he figures.

"Our market, in my opinion, is not slowing down like it is nationally," Young said.

Still, the national market has been an attention-grabber.

Nationally, median sales price of new homes in September were 9.7 percent below year-ago levels, the biggest drop in 35 years. In the same period, existing home sales were 14.2 percent below September 2005 nationally.

But sales numbers and median-price comparisons between June 1 and Nov. 1 show little sign of big changes in the Great Falls market.

There were 429 sales of single-family homes in the five-month period this year, up slightly from 414 in the same period a year ago.

The median selling price in the same period of 2006 was about $140,000, according to Great Falls Association of Realtors figures. The median last year? $129,000.

The numbers paint a picture of healthy, sustainable growth, said David Munroe, president of the Great Falls Association of Realtors.

While real estate activity often slows as the holidays and winter approach, "I don't expect any real slowdown," Munroe said. "We didn't get a big rise like everybody else did. We don't get any crashes.

"I don't see any kind of a bubble, any kind of a dip at all," he added.

The numbers for Great Falls and Cascade County also look solid in terms of residential construction.

The Montana Building Industry Association, a trade group, reports that housing starts in the county totaled 223 in the first nine months of 2006, just one shy of the 224 in the same period last year.

"If that's any indication, Great Falls has not slowed down," said Byron Roberts, the MBIA executive director, noting that last year was a record year for housing starts in Cascade County.

What does the future hold? Opinions vary.

Paul Polzin, director of the Bureau of Business and Economic Research at the University of Montana, says there is evidence that the real estate market statewide is slowing.

Polzin notes that increases in real estate prices in several cities, including Missoula and Bozeman, along with parts of the Flathead Valley, have kept pace with a national run-up in recent years. Those markets may be vulnerable to a softening market.

"I don't see any reason why we shouldn't be part of what's going on in the rest of the nation," he said. "I think there was some kind of bubble in Montana."

In recent years, Bozeman has had a red-hot real estate market, driven by parents buying homes for students at Montana State University, retirees looking for a relaxed lifestyle and former residents returning to their home state, said Donna Kostelecky, president of the Gallatin Valley Association of Realtors.

"With the Internet, people can live anywhere," and places with great scenery and outdoor recreational opportunities provide plenty of appeal, she said.

How's that market holding up?

"Things have slowed down in comparison with a year ago," Kostelecky said. "But the market is still very good. Buyers have a larger selection today than they had a year ago."

In the Flathead, there are more homes on the market than in recent years, a sign of a changing market.

"I think (the market) has done some adjusting, there's no question about that," Doug Gawe, a Realtor with Sotheby's International in Whitefish, told a Kalispell newspaper recently. "Maybe even correcting. It has sort of leveled out a bit, but it's certainly still moving."

What happens with interest rates, which have creeped up a little bit from historic lows in recent years, could have significant impact in the real estate market across Montana.

"As long as we can keep interest rates down, we will be in good shape," said Kostelecky.

Young, the Great Falls Realtor, agrees. Rates last week ranged from about 5.9 to 6.25 on 30-year mortgages, with rates on 15-year loans slightly lower.

"The interest rates are still phenomenal," Young said.

The demand for homes in the middle price range in Great Falls, say $130,000 to $200,000, remains very solid, Young and Munroe agreed.

"There may be some slowing down in the higher-priced stuff," said Munroe, noting he has a listing that includes a home and 20 acres near Manchester priced at about $600,000 that has had "very few lookers."

But with reasonable home prices and solid economic development efforts taking place in Great Falls, the real estate market appears to have a solid future.

"All the other cities in Montana have been discovered," said Young. "Now, it's our turn

a bit OT, but i think this illustrates how disconnected people are from the true meaning of money...

I went to the movies last night here in San Fran. On the way in I forgot to validate my parking ticket. My friend and I stood in line for a few minutes for the parking automated payment machine, before i realized i needed to validate. I remembered because i notice the guy at the machine was being charge d $17. I left my friend and went back upstairs to the customer service desk to get it validated. Later my friend told that he watched about 8 people pay the $17, either not realizing they could validate, or mumbling something about "ah screw it, i'm already in line, i'll just pay it". If you validate, it only costs you $6. $11 wasted because they couldn't take an extra 10 minutes and go up a flight of stairs (with escalators, too!). And a lot of these people were early 20s types, definitely not money to burn bay area programmer types.

"Time Bomb on the U.S. Border: Mexican Military Unable to Counter Insurgency" by Colonel Rex Applegate

http://www.cs. uwaterloo. ca/~alopez- o/politics/ timebomb. html

(Author of a number of standard texts on military and security topics,Col. Rex Applegate lived in Mexico for 15 years, representingU.S. military and police equipment companies.)

Mexico is about three times the size of Texas. The terrain variesfrom coastal lowlands to central high plateaus. Two-thirds ismountainous, with jungles in the south and deserts in the north.There is a 2,000 mile border with the United States and a 750-milefrontier with Guatemala. The current Mexican military cannot expectto always maintain peace in a nation of this size and topography.

There are 146,000 miles of roads (45% paved), 16,000 miles ofrailroads, approximately 100 airfields with scheduled flights, 5,000miles of oil pipelines and more than 13,000 kilometers of gas lines.The potential for sabotage and disruption are enormous, includingMexico City's vulnerable water and power supply.

In a civil war, military control of Mexico City would be paramountand the principal responsibility of the army. It would not be able toprotect the seat of government and infrastructure, control the localpopulation and concurrently conduct major operations elsewhere, as thesame time. A country- wide civil war would probably force garrisonsin the 35 other zones to protect major urban and industrial centers inthe areas of responsibility, leaving the rest of the country todissident forces.

I saw a sheriff's deputy serve eviction papers on a middle age couple as I drove by their street. There was a for sale sign in the front yard. I had to stop and watch. The couple had depressed looks on their faces, as they came out and argued for a while. Then the sheriff placed some type of paper work on the door. The couple went to the garage and started to move boxes, furniture and kids' bikes to the curb. A little while later a "Grapes of Wrath" looking pickup pulled up, and they loaded the stuff in the back. The wife was crying. All the doom and gloom I have read on the housing bloggs was happening right in front of me, like a Greek tragedy! The reality suddenly had a human face. I felt my body go numb, and my stomach churned. I had to leave, and I drove away.

TOL reports that home orders are down 57%. In addition TOL is scaling back on the land options it owns. Lots of land coming back onto the market. Being that land is 75% of the purchase price here in NJ this could be just what was needed. Other builders will start dumping land too and then prices will plummet.

Just got back from the dentist and every conversation I heard in the waiting room was about housing. Some people trying to close, thinking about buying a new house or remodeling the current one. It was really strange just sitting there and taking in all this talking. It was in Norfolk Va, almost like being in a Twillight Zone show.

Home owners odds-on to see rate riseNovember 08, 2006YOU might have backed the winner in the Melbourne Cup, but if you're a home owner your winning streak is likely to end today.

It's a near certainty that the Reserve Bank of Australia will this morning announce a 0.25 of a percentage point increase in the official cash rate.

An increase announcement, which follows the bank's meeting yesterday, will be the third rise this year and will take the cash rate to 6.25 per cent, it's highest level in six years.

The rise in the cost of borrowing to banks, if passed on fully to customers, will add around $40 per month to the average mortgage repayment.

While Prime Minister John Howard indicated he “never” wanted to see interest rates rise, he said it was an economic reality that an increase might be necessary.

“I have to accept the economic reality that occasionally a central bank does find it necessary to lift interest rates in the name of keeping inflation in check and guaranteeing our longer-term prosperity,” Mr Howard said.

“I never like to see rates go up but sometimes in the name of good longer-term economic management it is necessary, especially when the economy's running very strongly, it is necessary for the central bank to act rather than sit on its hands.”

I just got word from a friend at a property management company in Monterey, CA, that a big apartment complex, 500+ units, is planned to be converted to a condo complex. renters will be given the option to buy or move out. I have few friends living there.

Rate rises this year have increased the cost of an average mortgage by $540 a year, and a further 0.25 per cent rise takes an extra $40 a month out of borrowers' pockets. Australia has enjoyed 16 years of prosperity but as any punter knows, there is no such thing as a sure bet.

TONY BLAIR yesterday said the public had no problem with Orwell's Big Brother-style technologies as he announced his intent to push on with the controversial introduction of ID cards.

Surveys had shown that the public does not "have a problem" with the use of CCTV cameras and anti-social behaviour orders to protect them from crime, or DNA testing to detect criminals, said Mr Blair.

. . . Mr Blair insisted, "It was very clear from last week's arguments about surveillance and the DNA database that the public, when anyone bothers to ask them, are overwhelmingly behind CCTV being used to catch or deter hooligans, or DNA being used to track down those who have committed horrific crimes.